FOR IMMEDIATE RELEASE
Global Tactical Exchange-Traded Fund (ETF) investing is the best approach for diversification among sectors, industries and geographies, says David R. Kaufman, President and Chief Compliance Officer, Westcourt Capital Corporation. This process shifts the focus from individual security selection to the decisions that matter most: the dynamic asset allocation process, he adds.
From a service provider company at the marcus evans Canadian Institutional Investment Summit 2012, taking place in Gatineau-Ottawa, Quebec, October 15-16, Kaufman shares his thoughts on successful absolute return and alternative investment approaches.
How can ETF investments be managed in the portfolio to provide market exposure and diversification?
As institutional investors continually seek the lowest cost and most diversified asset class exposures, and as ETFs colonize virtually every asset type in the world, the focus is moving from product selection to investment process. In other words, how best to utilize these superior vehicles, and in what framework? What process has a proven, reliable track record? For us, global tactical ETF investing remains the best approach for diversification among asset classes.
ETFs can be managed actively or passively. The latter typically facilitate broad diversification and low-cost exposures. Using passively-oriented ETFs saves time and resources, and shifts the active investors focus to dynamic asset allocation, which is by far, the most important decision in determining overall portfolio returns.
What criteria should investors consider when looking for alternative investments?
Investors should consider how each investment type fits into the existing investment policy statement. The focus should be on correlations to the existing traditional investments, liquidity parameters, potential downside protection, inflation protection, yield type, and, of course, any opportunities for capital appreciation in the context of the risk taken.
What advice could you give to investors seeking to make absolute returns?
It is impossible for a single investment strategy to provide positive returns every year. This observation leads to a more holistic approach to portfolio management. In other words, does each potential investment improve the risk/return profile of the overall portfolio? This is why it is crucial to have low correlation among investments. Multiple strategies need to be at work to increase probabilities for positive results in all market environments.
How can alternative investments lower risk?
A properly diversified portfolio that includes prudent and measured allocations to alternative, non-correlated investments reduces risk through diversification. This achieves not only lower day-to-day volatility, but also protects capital during inclement market climates, ultimately leading to much lower drawdowns.
What other attributes should investors consider when dealing with alternative investments?
Investors need to work with managers that have “global macro” experience: those who are best suited to pursue dynamic asset allocation with ETFs. They should also take on a more realistic view of expected returns, given new economic and financial realities. Acceptable liquidity parameters are also a factor. Institutional investors can undertake a relatively illiquid portfolio in order to decrease volatility and increase total returns over the long run.
Contact: Maria Gregoriou, Journalist, marcus evans, Summits Division
Tel: +357 22 849 400
About the Canadian Institutional Investment Summit 2012
This unique forum will take place at Hilton Lac-Leamy, Gatineau-Ottawa, Quebec, October 15-16, 2012. Offering much more than any conference, exhibition or trade show, this exclusive meeting will bring together esteemed industry thought leaders and solution providers to a highly focused and interactive networking event. The Summit includes presentations on the global investment landscape, how to use alternatives to lower risk and how to get yields with safe assets.
The Investment Network – marcus evans Summits group delivers peer-to-peer information on strategic matters, professional trends and breakthrough innovations.
Please note that the Summit is a closed business event and the number of participants strictly limited.
About Westcourt Capital Corporation
Westcourt Capital act as an intermediary between our clients and the issuers of conservative alternative private securities. Our primary service is to conduct end-to-end qualitative and quantitative due diligence on alternative investment managers and provide fee-based, conflict-free recommendations to our clients regarding products that suit their alternative investment philosophy and time horizons.
About marcus evans Summits
marcus evans Summits are high level business forums for the world’s leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, think tanks, seminars and one-on-one business meetings. For more information, please visit www.marcusevans.com
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